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Intergenerational Elasticities of Housing Consumption and Income

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Abstract

We estimate intergenerational elasticities (IGE) of housing consumption and income in the U.S. Using surnames to link 1940 and 2015, we estimate a one-generation housing-consumption IGE of 0.73, higher than that of income at 0.52. Housing consumption IGE is higher for White compared to Black Americans and higher in the Northeast, patterns that contrast with income IGE. Inverting Engel curves suggests a total-consumption IGE of 0.72. Complementary to income IGE, consumption mobility is a closer measure of welfare mobility, and comparisons with income IGE inform intergenerational consumption insurance.

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  • Lancelot Henry de Frahan & Jung Sakong, 2024. "Intergenerational Elasticities of Housing Consumption and Income," Working Paper Series WP 2024-21, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:99306
    DOI: 10.21033/wp-2024-21
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    2. Gregory Clark, 2015. "The Son Also Rises: Surnames and the History of Social Mobility," Economics Books, Princeton University Press, edition 1, number 10181-2.
    3. Skinner, Jonathan, 1987. "A superior measure of consumption from the panel study of income dynamics," Economics Letters, Elsevier, vol. 23(2), pages 213-216.
    4. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 519-578.
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    More about this item

    Keywords

    Intergenerational elasticity; Consumption mobility;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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